Ontario Inc. just paid a $2.00 dividend. Ontario's dividends are expected to grow at 40 percent per year during the next two years, 20 percent over the following year, and then 10 percent per year, indefinitely.

a)  If the required return on Ontario's stock is 16%, how much would you pay for this stock today?

 

b) How much would you pay for this stock in two years?

Answer rating: 100% (QA)

Ontario Inc Stock Valuation This problem requires us to consider Ontarios future dividend stream and discount it to its present value using the requir... View the full answer